Forget tax credits and other subsidies: ICE car banning is way more effective than giving people money to buy electric cars. This is what Håkan Samuelsson at the “FT Live: Future of the Car Digital Conference.” For Volvo’s CEO, if electric cars are the future of personal transportation, putting a deadline for combustion-engined vehicle sales helps companies plan for EVs accordingly – and promote EV adoption.

Samuelsson said incentives do not help in building sustainable and profitable businesses. When carbon credits and subsidies end, what is left is what will keep these enterprises going.

Volvo XC40 Recharge Live Photos

Considering the automotive industry works with long-term products – which start to be developed now to be sold in three to four years – having clear rules about whether there will be a market for them or not in the future allows the necessary planning.

Anyone that sells a product that will not be legal in a few years knows they must find other solutions. For Volvo, plug-in hybrids and electric cars are the answer to the restrictions on combustion-engined cars. 

By 2025, the Swedish carmaker expects 50 percent of its sales will be of PHEVs, and the other half will be of BEVs. According to Samuelsson, the premium car market will go electric very soon, and Volvo intends to lead that shift.

Volvo may be among the lucky manufacturers that do not have to worry about automotive consolidation. At the same FT conference, Alex Hitzinger said the complexity involving electric cars – especially in what relates to software – will drive many car companies to either join forces or go bust.

Still at the FT Live event, Samuelsson said Volvo’s merger with Geely would be back on the table by Q1 2021. Volvo already belongs to Geely, so it is not very clear which would be the benefits of merging both companies. 

Anyway, this would be an expected consolidation. A surprising one would be Geely merging with Daimler, for example. The Chinese company already owns 9.69 percent of the German company’s shares. We need to see how Mercedes-Benz embraces electric mobility in its future products.

Source: FT and Reuters

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